If you are a business owner battling liquidity, then knowing these little talked about secrets are a must.
Our Directors at Moore Lewis & Partners share with you their experiences with assisting clients and what you need to know to equip yourself with the best possible chance at rising from the ashes.
Work on cashflow rather than profit
We have all heard the saying “cash is king” and it can’t be more relevant in this instance. It is important to start thinking strategically about your transactions and identify if you can create cash quicker. Debtors may be receptive to paying within 7 day for a 1 to 2% discount. Even paying 5% discount fee could be cheaper than some of the loan shark deals that businesses can be forced into.
Keep communication channel open with creditors
The worst thing you could possibly do is hide from creditors. They will only assume the worst if you avoid them. Be honest with them and don’t make promises you cannot keep. They will appreciate you telling them you can commit to $50 per week but can’t commit to $500, keep your goals realistic.
Keep all creditors the same when arranging payment plans
Sometimes this isn’t possible as some suppliers may be the daily lifeblood of your business and will stop supply immediately if not paid. However, if any creditors feel they are being singled out as the last to be paid they can take an aggressive approach to their debt.
Don’t wait until you are unable to pay wages
Many small business owners are busy with the day-to-day issues with running their company. Don’t be embarrassed to ask for help, you are not alone.
Haven’t paid the ATO for two or more BAS’s? This could be a warning sign!
It can be pretty easy to ignore warning signs and convince yourself that by working harder you will be able to turn things around.
The idea of liquidity is a scary one. We understand the blood, sweat and tears that you are putting into your business so let us assist you in keeping it afloat!
Get in contact with one of our Directors today by phoning on 07 4638 5300.